Unfortunately that a Lightwater residential lease is a wasting asset. The lease value reduces in proportion to its lease length. The extent of this is taken for granted in the first few years due to the reduction being disguised by increases in the Lightwater property market.Where your lease has approximately 90 years left, you should start considering a lease extension. If lease term slips under eighty years, you will then be required to pay half of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. The marriage fee is the amount of additional value that a lease extension will add the property Most flat owners in Lightwater will be able to extend under the legislation; however a conveyancer will be able to confirm whether you are eligibility. In some situations you may not be entitled. There are also strict timeframes and procedures to be adhered to once the process has commenced and you will need to be guided by your lawyer for the duration of the process.
Leasehold premises in Lightwater with over 100 years outstanding on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such situations there is often little to be gained by purchasing the freehold unless savings on ground rent and service charges merit it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. Leases with fewer than 70 years should only be referred to the issuing office where the following scenario applies, as discretion may be applied subject to bank approval: • Property is located in any of the following prestigious developments: Cadogan, Crown, Grosvenor, Howard de Walden, Portman or Wellcome Trust Estates in Central London AND • The value of the property subject to the short remaining term is £500,000 or more AND • The loan to value does not exceed 90% for purchases, 90% like for like re-mortgages, 80% for re-mortgages with any element of capital raising and 80% for existing Barclays mortgage borrowers applying for additional borrowing; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage at the outset of the mortgage. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Engaging our service gives you enhanced control over the value of your Lightwater leasehold, as your property will be more valuable and saleable in respect of lease length should you want to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Off the back of lengthy discussions with the landlord of her one bedroom flat in Lightwater, Louise commenced the lease extension process as the eighty year threshold was fast nearing. The lease extension was finalised in March 2011. The freeholder’s costs were negotiated to below 600 pounds.
In 2010 we were e-mailed by Dr Mia Sharif who, having was assigned a lease of a basement flat in Lightwater in January 2005. We are asked if we could shed any light on how much (roughly) premium would be for a 90 year lease extension. Identical flats in Lightwater with an extended lease were in the region of £210,000. The average ground rent payable was £50 collected yearly. The lease concluded on 18 May 2106. Taking into account 80 years outstanding we estimated the premium to the freeholder for the lease extension to be within £8,600 and £9,800 not including expenses.
Last year we were contacted by Mrs W Bernard , who acquired a garden flat in Lightwater in July 2012. We are asked if we could approximate the price would be to prolong the lease by 90 years. Comparable premises in Lightwater with 100 year plus lease were valued about £275,000. The average ground rent payable was £45 collected monthly. The lease ran out in 2095. Taking into account 69 years left we calculated the premium to the freeholder for the lease extension to be within £12,400 and £14,200 plus costs.